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Will Treasury coffers trump student pockets?

Ministers have been accused of restricting opportunity for poorer students by penalising universities that choose to help them through their studies with bursaries and other upfront financial support.

The claim comes in the wake of this week's announcement on access agreements by the Office for Fair Access, which indicates that the vast majority of English universities will be unable to compete for the 20,000 "marginal" undergraduate places they will lose as a result of proposals in the government's White Paper.

According to Offa figures, after fee waivers are taken into account, only 16 of 123 higher education institutions in England are charging fees of £7,500 or less.

That figure is the cut-off point for being permitted to bid on the marginal places the government is creating in an effort to drive down the cost of an undergraduate degree.

Several institutions are just above that threshold and could make adjustments to their access proposals to bring fees under that level, but others are significantly over because they have chosen to offer bursaries instead of fee waivers.

Some have argued that bursaries are of greater use to poor students as they provide cash to pay for daily bills, while waivers help the Treasury by easing the student loan bill.

Overall, the average fee level for English higher education institutions after waivers is £8,267.

A number of universities have post-waiver charges of £9,000 owing to their investment in bursaries. Among them are several institutions that attract a high percentage of students from lower-income backgrounds, including the universities of East London, the West of England and Lincoln.

UEL, for example, plans to put almost £6 million into bursaries and scholarships in 2015-16 but nothing into fee waivers.

Its vice-chancellor, Patrick McGhee, said: "I regret the (government's) approach whereby universities are, in relation to the retrospective and arbitrary £7,500 threshold, encouraged to offer fee waivers rather than bursaries, which actually help students when they need help most - while they are studying.

"If I have to choose between helping the Treasury or helping my students, I will choose my students every time."

Les Ebdon, chair of the Million+ group of new universities and vice-chancellor of the University of Bedfordshire, which has an average post-waiver fee of £8,665, said ministers had "changed the rules of the game" by introducing the proposals after institutions had designed their access agreements.

"This market in student numbers is clearly designed to cut the cost of the student loan book rather than improve choice for students," he said.

Libby Hackett, director of the University Alliance group of institutions, all but one of which has an average fee above £7,500, said the government's policy "makes no sense" and would strip out the middle part of the sector.

"They are forcing the polarisation of the sector and are creating a situation where nobody can operate in the market between £7,500 and £9,000," she said.

Two unnamed universities have adjusted their fee proposals in light of the White Paper, but for most it will be too late to make changes when significant time and resources have already been ploughed into marketing for 2012-13.

However, those just above the £7,500 cut-off may make changes.

Van Gore, vice-chancellor of Southampton Solent University - which currently has a post-waiver average of £7,747 - said that there were "technical adjustments" that could be made to bring that figure under the limit.

Meanwhile, the system means that research-intensive universities that have proposed investing a large amount on fee waivers have lower average charges than some post-1992 institutions.

The University of Bristol, for example, which plans to spend £9.5 million on fee waivers in 2015-16 and £640,000 on bursaries, has an average fee after reductions of £8,168 despite charging a headline fee of £9,000 across all courses.

Liam Burns, president of the National Union of Students, said fee waivers were being used by the government as a "cynical attempt" to cover up the impact of higher fees.

Defensive moves: Welsh fees set high in case central funding runs out

Welsh universities have set high tuition fees because they fear the funding council could run out of money subsidising Welsh students studying at English universities, a vice-chancellor has said.

The Higher Education Funding Council for Wales approved all 10 Welsh universities' access plans on 11 July, with fees averaging £8,800, £400 more than in England.

David Warner, vice-chancellor of Swansea Metropolitan University, said universities had chosen to charge close to the maximum amid fears that the government's pledge to subsidise Welsh students "won't leave anything in the Hefcw pot".

Welsh students will not pay more than the current annual fee of £3,375, adjusted for inflation, even if they study in England, with the state making up the difference.

Professor Warner called Swansea Metropolitan's decision to charge fees of between £8,500 and £8,750 a "gesture" to show it was trying to push down costs. But he said: "It isn't a big gesture, because we can't afford to go bankrupt."

Philip Gummett, Hefcw chief executive, agreed that Welsh universities "will need to pitch their fees high to compensate for the teaching grant going to England".

Opposition politicians have asked whether the pledge to subsidise Welsh students remained affordable, but the government said it was "confident in its costings".